TCM in Trouble -What a big drop Thompson Creek faces solvency issue – TD TD Securities analyst Daniel Earle pointed to Thompson Creek's highly leveraged balance sheet and its unsustainable molybdenum operations at current metal prices in support of his bearish outlook on the stock Casper Hedberg/BloombergTD Securities analyst Daniel Earle pointed to Thompson Creek's highly leveraged balance sheet and its unsustainable molybdenum operations at current metal prices in support of his bearish outlook on the stock. Thompson Creek Metals Co. Inc. appears to be running out of cash, Daniel Earle at TD Securities warned in a report Wednesday. The analyst said the miner’s molybdenum operations are unsustainable at current metal prices, and noted that its Mt. Milligan project in central British Columbia is a very low-grade mine. Mr. Earle also pointed out Thompson Creek’s balance sheet is highly leveraged and all six of the comparable ramp ups of large milling operations in North America significantly underperformed. “Whatever the ramp up, we believe that the company’s long-term solvency is a major issue,” the analyst told clients. “With a ‘bad’ ramp up and even lower metal prices, we could see the company pressured to refinance next year.” His forecasts suggest Thompson Creek will not be able to generate enough cash to repay approximately US$1-billion in debt maturing between 2017 and 2019, assuming prices of US$1,300 per ounce for gold and US$3 per pound for copper. Mr. Earle met with Thompson Creek’s newly appointed chief executive, Jacques Perron, on Dec. 2. These discussions left the analyst confident that the company has several options for resolving its debt obligations that could avoid a significant dilutive equity financing, including a refinancing of its outstanding debt and/or a renegotiation of gold-streaming deals with Royal Gold Inc. However, Mr. Earle does not expect Thompson Creek to fully evaluate these options until the ramp up at Mt. Milligan is complete and it has made a decision on the long-term viability of its Thompson Creek and Endako mines. He left his reduce rating and 50¢ price target on the stock unchanged.